Leslie Channell admits he’s not a typical case for treatment. Channell, known to everybody as Chann, is a registered pilot who served 24 years in the army working on Apache helicopters. Chann also happens to be scared of heights. He doesn’t mind flying planes or sitting on the side of the Apache with the door open; he’s just terrified of going up two or three floors of a building or driving over a bridge.

Chann is nervous; his speech is fast. He says he’s sweating. We meet at a trendy startup in Oxford, where he is about to undergo virtual-reality therapy for his phobia (although the term “virtual-reality” therapy is controversial: some say the VR is just a tool for the therapy; others argue that the virtual reality is the therapy itself). Psychologists are now trialling VR for all kinds of conditions, from phobias to pain management to post-traumatic stress disorder (PTSD).

There are two other people in the room. Cognitive-behavioural therapist Polly Haselton sits behind a curved computer screen watching Chann, occasionally asking questions. Daniel Freeman, professor of clinical psychology at the University of Oxford and one of the world’s pioneers in this field, watches Chann’s every movement. Freeman explains there are three common fears of heights: that you will fall; that what you are standing on will give way; or that you will jump, which is known as “the call of the void”. Chann’s fear is of falling.

He straps on his virtual-reality headset (also known as a head-mounted display, or HMD). Inside the headset, he will find himself fully immersed in a three-dimensional world. Today, he is going to level four of a 10-storey building in New York to rescue a kitten stranded on a branch of an indoor tree.

Chann has to use a lever to push himself on to a small platform towards the cat. He is a stocky, tough-looking man in his late 50s. But he’s not looking tough any more. His voice is rising, and he’s shaking. He edges forward along the virtual branch. In real life, his feet also move gingerly – then come to a sudden stop. His breathing becomes louder and more staccato.

“Yeah. I really didn’t want to be there. I had to think I was in a room in Oxford. ‘You’re not here, it’s all OK, do it.’”

Chann is one of a dozen people currently testing this software. (Next month, the trial is being extended to 100 people.) Already, he says, it has made a difference to his life. “Yesterday, I went on a rollercoaster with my daughter. I had never gone on one before. Not the big ones, the smaller ones, but still...” He’s spent only around 20 minutes in the virtual world today, but he is exhausted. “I was worried about coming here, and I’ve done it, and I’m buzzing. Elated.” He pauses, trying to catch his breath. “But I know in my heart of hearts, if there was a real cat on level four, I would not be going out and getting it. Polly asked me, what if it was a little baby? That would change the dynamics.”

With VR, you can get people to try stuff they haven’t done for years, then they realise they can do it in the real world

Freeman has been working with VR for 16 years. What he loves about this therapy is its simplicity. “There are very few conditions VR can’t help,” he says, “because, in the end, every mental health problem is about dealing with a problem in the real world, and VR can produce that troubling situation for you. It gives you a chance to coach people in other ways of responding. The people I see are anxious or depressed, or worried about people attacking them, and what they’ve done in their life is retreat from the world. With VR, you can get people to try stuff they haven’t done for years – go in lifts, to shopping malls, then they realise they can do it out in the real world.”

Acrophobia, or the fear of heights, is just the start, Freeman says. He has already developed VR programs that treat people with paranoia – for example, placing them in virtual libraries, lifts or on tube trains with strangers eyeballing them. In a Medical Research Council-funded study, he used VR with 30 patients to help them re-learn that they are safe around other people.

“The results were remarkable. From just 30 minutes in VR, there were large reductions in paranoia. Immediately afterwards, more than half the patients no longer had severe paranoia. Importantly, the benefits transferred to the real world. It wasn’t a definitive study. It was small and short-term, but the results do show great potential.” The program will initially be used in NHS mental health services with a staff member present, but Freeman believes that, ultimately, it could be available commercially.

Nearly two million people sought advice for mental health issues in 2015, according to the Health and Social Care Information Centre – up from 1.2 million in 2010. Meanwhile, the number of mental health nurses fell by nearly 15% from 45,384 in 2010 to 38,774 in July 2016, according to a written parliamentary answer from Philip Dunne, the health minister. The British Medical Association recently revealed that in 2016-17, 5,876 adult patients with mental health conditions were referred to another health trust for treatment, with some patients being sent 600 miles away to Scotland. Against this backdrop, virtual reality is the great hope for many mental health professionals. Some psychologists believe they are on the brink of a VR revolution. Then again, they were saying the same thing a quarter of a century ago.

Barbara Rothbaum’s office in Atlanta, Georgia, is closed due to the impending arrival of Hurricane Irma. In between electricity cuts, I manage to speak to her at her home. Rothbaum is a professor in psychiatry, a clinical psychologist at Emory University, and the founding mother of exposure therapy using virtual reality. “We published the very first study using VR to treat a psychological and psychiatric disorder back in 1995,” she tells me. Again, it was to treat acrophobia, and the results amazed Rothbaum. “Seven out of 10 people who got the virtual reality reported putting themselves in real-life height situations afterwards.” That was when they thought they were on to something big. “We used to say: ‘We’re on the cutting edge of the lunatic fringe.’ That was our line at the time.” She laughs.

After acrophobia, Rothbaum developed a VR program for fear of flying. This was even more effective, because traditional exposure therapy (paying for yourself and a therapist to travel on a plane) is time-consuming and expensive. “I can do all that in my 45- to 50-minute therapy session, with ultimate control. So if I know they’re not ready for turbulence, I can guarantee there won’t be turbulence.”

Rothbaum then went on to do pioneering work with Iraq and Afghanistan war veterans suffering from PTSD. Before VR, veterans were confined to imaginal therapy – basically, shutting your eyes and thinking yourself back to the original situation. But now Rothbaum could recreate it for them in a controlled environment. “With PTSD, especially in military folk, they are very avoidant emotionally. With VR, it’s harder to avoid, because it is such a potent stimulus.”

Early on in her VR career, a public-private partnership between Emory University and the Georgia Institute of Technology insisted Rothbaum and her colleagues form a corporation and patent their software. The result was a company, Virtually Better, that designs environments for fellow clinicians to use. “That is my conflict of interest,” Rothbaum says. Whoever she speaks to, she instantly declares it. Does it worry her that she is responsible for the research showing how effective her own VR products are? “It has done, over the years,” she says. “One of the ways I manage it is, I disclose, disclose, disclose.”

You see a precipice and you jump back and your heart starts racing. You know it’s not real, but it doesn’t matter

Rothbaum is not alone. VR therapy is a small, niche world. Read the scientific papers, and the same names crop up again and again. And most of these academics are now also running commercial companies. As traditional funds dry up for universities, people such as Rothbaum are increasingly reliant on business – often their own business – for support in their research.

As it happens, Rothbaum says, she lacked the cut-throat instincts to be a good businesswoman. “A criticism of Virtually Better was that it was run more like an academic department than a business. We knew how to write grants so we’d write small business grants and enjoy collaborating rather than competing. I thought it was an interesting way to do exposure therapy and wasn’t very mercenary about it.”

Has she ever used VR to treat her own fears? “No. My fear early on was that somebody was going to make a lot of money, and it wasn’t going to be us. Actually, that is probably still going to come true. But I’ve adapted to that; it’s all right.” She’s still not rich? “Oh no, not by a long shot, no.”

Despite research showing its efficacy, the VR therapy revolution did not take off in the 1990s or the noughties. This time around, though, it looks as if it might. Mel Slater, a professor of virtual environments, shows me why. We meet in the London HQ of Digital Catapult, a government initiative to promote the digital economy. Slater hands me the headset used in the virtual psychotherapy sessions he is developing. “The VR world burst open in 2013 when this Oculus Rift was released for a few hundred dollars, compared with the next credible headset of $50,000, and now all the big companies have gone into it.”

Slater talks quietly and, facially, has a touch of Woody Allen about him. Although primarily a computer scientist, he is now largely based in the psychology faculty at the University of Barcelona. Slater is one of the most-in-demand academics in the virtual world, with an endless list of titles, including professor of virtual environments at University College London, co-founder of the company Virtual Bodyworks, and immersive fellow at Digital Catapult. He also works with Daniel Freeman on treatments for persecutory delusions and acrophobia.

Like Rothbaum, Slater is one of the early 1990s pioneers. “Nobody told me virtual reality died, so I stayed with it.” He smiles.

And had it died? “No, but for a long time people said, ‘It’s not going anywhere because it’s too expensive.’ The equipment we used at UCL cost £1m. The equipment I have in Barcelona, when I set up there 10 years ago, was £100,000. Now I can do the same thing with £3,000.”

Slater says the human reaction still surprises him. “There is some level of the brain that doesn’t distinguish between reality and virtual reality. A typical example is, you see a precipice and you jump back and your heart starts racing. You react very fast because it’s the safe thing for the brain to do. All your autonomic system starts functioning, you get a very strong level of arousal, then you go, ‘I know it’s not real’. But it doesn’t matter, because you still can’t step forward near that precipice.”

…then analyses himself as Freud. Photographs: Event Lab, University of Barcelona, Spain

In some ways, he says, virtual reality beats reality because it enables you to experiment in ways you can’t, physically, in real life (for example, putting people in different bodies to experience what it is like to be a different gender or ethnicity) or in situations you would avoid.

“I was in one session where the guy had such a fear of public speaking that he told us about speaking at his daughter’s wedding, and we said, ‘How old is your daughter?’ and he said, ‘Three!’ So he spoke to a virtual audience. He said: ‘I can’t do this, I’m turning bright red, my voice is an octave higher.’ The psychologist later played it back to him and said: ‘Is your face red? No. Are you speaking an octave higher than normal? No.’ The psychologist did in one afternoon what would normally take 12 weeks.”

I tell Freud I have just read comments about an interview I wrote, and feel full of self-loathing

I have seen headlines suggesting that VR can cure depression. Surely that is an exaggeration? “Cure, I don’t know,” Slater says. “But we published a study last year where we reduced the level of depression among a cohort of people through a VR intervention not that dissimilar from what I’m going to show you today. Part of having depression is that you are overly self-critical and cannot give compassionate thoughts to yourself. So in the VR, you see a crying child. Beforehand, the therapist has given you a structure of things you should say to other people in order to give them compassion. So you say these things to the child who starts looking at you and stops crying. Then, in the next phase, you are that child, so you then see and hear your previous self giving you the compassionate speech. When we gave this to a group of moderately depressed people three times, the level of depression decreased.”

I put on my headset and sit in front of a screen. The program I’m trying, called VReflect-Me, is still being developed for people with anxiety issues and depression. It is based on the notion that, when advising friends, we are often kinder and more objective than when analysing ourselves.

First of all, an avatar is created of me. Then I embody that avatar. I am in a therapy session with a psychiatrist (in this case, Sigmund Freud) and I tell him my problems. In the next stage, I embody Freud. When my head moves, Freud’s head moves; when my hands move, his move; and when I’m ready, I advise myself in the form of Freud. (Slater says that Freud is a useful avatar, because you tend to adopt characteristics of your avatar; so, if he is wise, you become more wise.)

I tell Freud I have paranoid tendencies; generally, I think I’m incredibly boring with nothing to say and hate formal social situations (not the pub), because I fear my stupidity will be exposed. More specifically, I tell Freud, I have just read comments on social media about an interview I just wrote saying that I gave my subject an easy ride. I am full of self-loathing, and feel useless at my job.

Now I switch roles, and am Freud advising me. The first time I do it, I’m too self-conscious. Slater gently suggests that I was not fully immersed. I ask if I can do it again. This time, I go for it. It might not be the way Freud would have responded, but I listen to my problems and then tear into myself – rightly or wrongly, I make a good case for not being boring, stupid and a rubbish journalist. I verbalise everything and dismiss it as solipsistic nonsense. I then return to my own avatar. “Good points. Well made,” I say to Freud. And I mean it.

When I take off my headset and leave the virtual world, my breathing is fast and shallow – not unlike Chann’s after he’d been to the heights. I feel both ecstatic and emotional. Tearful, almost. Even if it doesn’t last, it’s been a useful exercise. I might say this kind of stuff to myself in my head, but it feels different when you say it out loud.

Slater is pleased with me. “Wow! You did amazing. You said, ‘You, you, you!’ which is great.” What he means is, I successfully got out of my head and into Freud’s. It strikes me as a powerful tool for therapists. There is no way I would have said what I said, as Freud, if I was simply talking to a real person.

But I can’t help thinking I’m a relatively safe case. What if I were more vulnerable? What, for example, if I suffered from the acrophobic’s call of the void, did the VR program, convinced myself I’d overcome my phobia, went to the nearest high-rise and jumped?

Dr Kate Anthony, an expert on the use of technology in therapy and a fellow of the British Association for Counselling & Psychotherapy, stresses that technology is there to be used alongside therapy, rather than instead of. “VR is a good opportunity for helping psychotherapists,” she says, “but we’re not at a stage yet where virtual reality is going to be able to replicate a human therapist.”

It’s all very well, she adds, having software to encourage you to talk and tackle your fears, but that will take you only so far. “The VR therapist can’t respond in any meaningful way, and without that meaningful response, I don’t think the client is going to progress.”

Once VR treatments have been proven to be effective, she says, she would like to see them available on prescription. What about making them commercially available? No, she says, it’s too risky. “If we’re talking about paranoia, for example, any of these situations can trigger the client. The trouble with something like that is it could bring up all sorts of issues. I would want to see it closely managed.”

Dr Michael Madary, a philosopher and technology ethicist, and his colleague Thomas Metzinger, have drawn up a code of conduct for the use of VR, some of which addresses its use in therapy. He thinks VR can have a positive impact, but that therapists must not blind themselves to the dangers. One particularly sensitive issue, Madary says, is data. Participants in studies know their data is confidential, but that could be very different if commercial companies invest in VR therapy purely for profit. “With motion tracking, particularly facial tracking, users are going to reveal a lot about themselves – about their mental state, about how they react to various stimuli – and that data can be collected and then used as a powerful bargaining tool.”

VR is no match for the empathetic generation | Charlie Brinkhurst-Cuff

Read more

He envisages a scenario where there is an advertisement flashed, or product placed, in the virtual world and the content creators collect the response of users to that ad based on the faces they make. “You can imagine seeing your avatar in a new jacket, for example. There will be a lot of powerful techniques that emerge in marketing, with widespread use of motion capture.”

Mel Slater accepts that virtual reality can be abused. But anything can, he says. “You can use a bread knife to cut bread or to stab someone, so any tool can be misused deliberately. This is why I think the applications in clinical psychology have to be led by people such as Daniel, who know the risks.”

Back in Oxford, Daniel Freeman is not so sure the programs need his presence to be effective. He is talking about his company Nowican, and anticipating the launch of its first product – Nowican Do Heights, the acrophobia program being trialled by Chann.

He hopes that the NHS and individual psychologists will invest in it, but believes its prime use will be for individuals seeking help. “We’re putting a virtual coach in there so you don’t need a therapist, and we’re also looking at better techniques than simple exposure.”

Is he in danger of doing himself out of a job? “No. We’re not saying it has to replace the therapist. Some people will want to talk to a therapist, and sometimes the complexity means you need a therapist. But the issue is, there aren’t enough therapists.” Freeman is hoping that, before long, we will be able to download this as an app on our smartphones.

In a world of diminishing NHS resources, Freeman regards it as a no-brainer: “I see people who have been waiting 20 years and not had a chance of seeing a therapist. The idea that we can give so many people the chance to access what the best therapists should be doing – that is really exciting.”

Watch the Guardian’s latest VR experience The Party, filmed from the perspective of a 16-year-old girl with autism, on our new Guardian VR app. You can download it from the Apple App Store and the Google Play Store, or watch it as a 360 video, along with other Guardian VR experiences, at theguardian.com/vr